Impact of information technology on Hotel Business - Essay Example

?Impact of Information Technology on Hotel Business By Table of Contents Table of Contents 2 References 15 Introduction Many experts fromhotel industries believe that the applications of information technology (IT) are one of the easiest ways to establish a bridge with potential customers. Thus, the IT applications approved and implemented by hospitality industry can play a vital function in facilitating hoteliers gain knowledge of customers’ choices and preferences, living styles and patterns, and staying trends with the intention that services can be moreover improved and customized through better information sharing. Hence, these changing information technology trends in hospitality industry force all economical hospitality firms to practically take advantage of any innovative technology that can offer their business considerable perfection in forms of greater customer satisfaction and employee efficiency. There are numerous researches have been conducted to determine the impact of information technology on hospitality industry. In this scenario, a research that was carried out in Australia by (Lee et al., 2003) declared that the information technology has significant influences over the capability of hospitality firms in order to facilitate their workers, increase efficiencies, enhance service quality, gain competitive edge, effectively build and maintain associations with customers, and increase overall business productivity (Karadag & Dumanoglu, 2009; Lee et al., 2003; Galen et al., 2003). This paper discusses the potential impacts of information technology on hospitality industry. In this scenario, this paper will discuss the information technologies that are being used by the hospitality industry to manage their business operations. This paper also discusses the advantages gained by the hospitality industry from these information technologies. Impact of IT on Hospitality Firms It is an admitted fact that from entertaining visitors or guests and creating menus to monitoring staff members, information technology has significantly changed and modernized the way the hospitality sector works nowadays. In addition, the hospitality industry is always struggling to discover more innovative technologies as they are changing the format of the hotel and restaurant business. Many researches show that information technology has become a key driver of growth for the hospitality industry in the past few years. In addition, up-to-date tools and software applications for carrying out tasks such as flawless communication and distribution of operational information, synchronized inventory access, and collection of important performance data, have changed the structure of hotel and restaurant business. As well, one of the biggest advantages of this process has been the improved customer experience and satisfaction, leading to higher devotion. In this way, information technology has augmented earnings for hospitality industry, and also helped them in saving expenditures on a long-standing basis by minimizing the human resource and enhancing the quality of service and business performance (Pandey, 2010). Historically, the business processes of hospitality firms have been managed using cards, manually, or paperwork at the front desk in order to keep up a correspondence with old and existing customers. In this scenario, hoteliers were mainly at the compassion of the needs of guests to get there, and on their own efforts and staff to be there for possible surges or extended deficiencies of tenancy. Without using information technology supported methods hospitality industry was facing serious problems. In this scenario, (Nikolis, 2008) discuss some of the important areas of the hospitality industry which has been improved by the information technology. According to (Nikolis, 2008), the basic reason that information technology has turned out to be significant is its usefulness for the billing. In view of the fact that traditional paper-based and manual data entry was slow, time-consuming and ineffective, and it was not helpful in letting the hotel owner know what the condition of their hotel was. Thus, to address these issues the developments in up to date record keeping take into consideration a hotel owner to keep up to date with what they have readily available, how much investment it will take and how much time it will take (Nikolis, 2008). Additionally, accounting is a complex activity of hospitality firm, but the availability of modern accounting software applications (particularly those which are specially designed to tackle specific needs and requirements of the hospitality sector), allows hotel owners to make on time and accurate decisions. As a result, business products and services that are no longer needed by the hotel can be speedily eliminated to save money; on the other hand those for which the demand is increased can be increased in capacity or customized in an attempt to diminish the intense usage. In addition, the hospitality industry has long been acquainted with reservations and booking rooms over the telephone, however information technology has long-drawn-out well beyond that. In this scenario, information technology allows the hospitality industry or hotels to work in partnership with a lot of online travel agencies and booking services to get their rooms booked online, even without requiring hiring high-priced employees. In fact, it is also helpful for the a hotel to publicize their open special deals and rooms straightaway to people who would be almost certain to pay for them, in place of spending a lot of money on business marketing in a distracted way (Nikolis, 2008). Moreover, the effective use of information technology provides the hotels with an excellent platform and management of bookings in an attempt to let a hotel to effectively make best use of their assets, as well as to be acquainted with beforehand when large groups or lean times are approaching. Thus, in this way the management of a hotel can develop plans which can allow them to hire staff for the short-term, good times to modernize or expand their business, or other aspects, for the reason that they can measure the condition of their hotel at present and for the next couple of months with simply a small number of mouse clicks on the computer. Though, the developments and advancements in information technology have expanded a great deal beyond booking. At the present, there are numerous tools and technologies available for hotels. In this scenario, the Internet facility has become one of the basic needs for vacationers or travelers (staying at hotel) who want to contact those in their house, as well as for those who are on a business trip and they are required to stay in touch with their office/organization (Bulchand-Gidumal et al., 2011; Baines, 1998; Nikolis, 2008). Applications of Wi-Fi technology in Hospitality Firms Keeping in mind the growing needs and expectations of their customers, the majority of hospitality firms have started making use of the latest internet technologies such as wireless internet. In fact, applications of wireless internet are commonly seen in hotels these days for the reason that it is a very helpful service or facility for hotels to offer. Basically, Wireless LANs (Wi-Fi) have been referred as a most attractive advancement of information technology in hospitality sector. On the other hand, according to various researchers, the implementation of Wi-Fi technology is always aimed at increasing the hotel efficiency by making straightforward registration and offering greater than before functionalities to hotel management and staff members, instead of using it as a service to provide to customers with the intention of improving their experience. Though, whatever the scenario is, Wi-Fi is still beneficial to the hospitality industry (Bulchand-Gidumal et al., 2011; Baines, 1998; Nikolis, 2008). In addition, according to various researches Wi-Fi technology has been considered as a basic need for the hospitality industry since 2003. In fact, many researches show that Wi-Fi is the latest technology customers’ care most about. These results were extracted from a survey in which 82 percent of respondents agreed to the presence of Wi-Fi in hotels. In the same way, (Greif, 2010) concluded some useful results based on the responses of more than 53,000 guests. According to their findings, Wi-Fi is the most important hotel amenity. Moreover, many researchers agree that in most cases, customers do not mind paying for getting internet access for the reason that it is trustworthy and provides reasonable throughput, a point of view that is at the present old-fashioned. In recent times, the majority of the hotels provide Wi-Fi service free of cost as a useful initiative for increasing customer satisfaction and even taken for contracts by customers is an amenity that will almost certainly turn out to be the standard till 2015 (Bulchand-Gidumal et al., 2011; Baines, 1998; Nikolis, 2008). On the other hand, not all hotels offer Wi-Fi connection free of charge. In fact, a lot of hotels come out to charge a lot of money on a more frequent bases than a lot of low level hotels do. In addition, many researchers have proved that Wi-Fi access should be free of charge and it should not be charged in the form of an increase in room charges. Despite the worth of offering Wi-Fi connection free of charge to customers as well as the wide-ranging use they make of the Internet greatly contributes to customers’ satisfaction (Bulchand-Gidumal et al., 2011; Baines, 1998; Nikolis, 2008). Impact of the Internet on Hospitality Firms and Customers As discussed in many researches, business related people even necessitate that a hotel offers internet services in order that they can carry on working even they are on the road. In fact, almost all the hotels can provide such services easily, for the reason that all that is necessary for this is a wireless router and different equipments to make certain every part of the hotel is covered by the network. In addition, latest developments in wireless internet also make an allowance for the wireless internet offered for guests to be used to network the hotel itself. In the same way, other similar equipments such as door locks, security cameras and a lot of other devices required for the hotel safety and security can be connected to the network, with the intention that it can notify the hotel staff when a fire alarm goes off, a door is propped open or doubtful action taken place. Despite the fact that the hotel guests or visitors are completely unacquainted with it, but this kind of additional security and safety actually keeps them secure, as well as in case of any problem they will undoubtedly be grateful for the benefits of such a system (Nikolis, 2008). Many academic researchers and industry practitioners have started focusing on the significance of internet applications in a different perspective for the hospitality industry. The use of the Internet can be beneficial for both the hospitality firms and the customers. For the hospitality industry, the internet can provide a way for them to put up for sale their products and services to worldwide customers devoid of facing any geographical or time limitations. In this scenario, the driving force for hospitality sector to build and implement their web sites comprises minor supply and delivery expenditures and as a result more advantages and increase profits, and a huge possible marketplace. On the other hand, customers can search for their required information and directly stay in touch with their service providers anywhere and at anytime (Law & Hsu, 2005). In their research paper (Gilbert et al., 1999) discuss the importance and the benefits of using a web site for the promotion of a hotel. According to various researchers, creating and implementing a Web site is reasonably priced since associated costs are fairly low. In addition, once a web site is established, it facilitates a hotel to carry out more targeted business operations 24 hours a day, 365 days in the year, along with a worldwide access without any limitation or restriction. In view of the fact that a web site can allow a person with an Internet connection access, regardless of time zone, geography or computer system. In this way, it makes the products of a hotel easy to reachable to the new worldwide marketplace as well as can also decrease the need for physically attending a business and consumer shows (Gilbert et al., 1999). Despite the above discussed features of the web sites have the capability to provide “a comparatively level play field”. In fact, the web site offers an equal opportunity to access the worldwide marketplace for all sizes and types of hotels. Additionally, this wonderful technology also allows the distribution of stylish digital images, sound and video. In this scenario, electronic brochures of a hotel can comprise three-dimensional images and videos of the facilities and property which possible customers could look at continuously. In addition, many researches and surveys have acknowledged the Web as a most helpful hotel information source as well as a hotel-booking medium. Also, the results of a survey which was carried out by travmag, a UK travel Web site collected viewpoints from almost 3,000 Web visitors, shown that more than 89% of the web visitors are making use of the web sites to search for information and more than 28% of them are searching for information specific to hotels (Gilbert et al., 1999; Ip et al., 2011). In addition, the use of web site as a marketing tool offers much greater extent of interactivity than other communication channel. For example, a hotel can make use of a web site to offer electronic forms for customer completion and hotel can respond straightforwardly using electronic mail (e-mail). This kind of communication can enhance customer relations and as a result a hotel can build customer loyalty. In addition, hotel chains can make use of the website as an internal marketing tool to establish and maintain long-standing associations with its human resources. In addition, website can be used for incentives or customized surveys which are affordable. On the other hand, the results of various researches demonstrate that just about 4.2% of the hotel chains make use of the web site to conduct research studies, by allowing customers to fill online surveys (Gilbert et al., 1999; Ip et al., 2011). Current and Future Applications of IT in Hospitality Firms In his article, (Pandey, 2010) discuss a wide variety of tools and technologies which can be used to perform every task in the hospitality industry. Additionally, these tools and technologies can be used by the hotels to carry out different tasks varying from monitoring staff and managing point-of-sale, to financial planning and everyday tasks management. In this scenario, the majority of tools and technologies for hospitality industry can be generally divided into two categories: front office requirements and under back office operations. Front office technologies are used to deal with the point-of-sale (POS) issues. On the other hand, back-office technologies consist of the software applications such as financial reporting, inventory management, menu management, security management, green technologies, data management, labor management, etc. In addition, there are also numerous other technologies that can include software for restaurant management, customer relationship management, online reservations, etc. With the exception of all these tools and technologies, online appearance by using the Internet, website, and social media platforms such as Twitter and Facebook, helps hospitality industry enhance brand recognition (Pandey, 2010). In the future, a lot of innovative and most modern IT tools and applications are also expected for the hospitality industry. Even, many international hotels from all over the world have already been making use of these technologies to enhance their business effectiveness. There are many instances of these latest technologies and one more commonly seen technology is client server technology (CST), which offers a lot of benefits to hotels chains. Basically, they let the owners efficiently put together dispersed or disconnected hotel operations such as multiple computer platforms or software, collections over the years. In this scenario, they make simpler the process of report creation and MIS (management information system) facility, making these operations more well-organized and smooth. These days, many hotels have started making use of information systems to improve their data collection process. This data and information later on support them in decision making. Actually, hospitality firms use this data to extract interesting facts and patterns for instance, how they can increase their sales, what services should be improved and how they can attract more customers towards their hotels (Law & Lau, 2000; Pandey, 2010). (Law & Lau, 2000) also discuss the importance of data and information collection for the hospitality industry. According to their viewpoint, the hospitality industry is extremely information-intensive. Hotels have long been making use of the hospitality data and information to improve functioning effectiveness, in an attempt to offer tailored guest services and have power over expenditures, and to offer performance indicators for instance financial situation and profit margins. In addition, the everyday operations performed inside a hotel need individual computer systems to function closely with the intention that the hotel can provide high quality services to its customers. Many studies have stated that information technology has modernized hotel operations. According to various researchers, in the hospitality industry the use of the information technology begins and ends with hotel customers. In this scenario, information technology works when it enhances customers’ satisfaction, as well as when it makes employees more dynamic and productive and better able to hand out their guests. Players that are in expansion mode and are trying to overhaul their IT infrastructure can use these solutions to reduce their IT costs and improve staff productivity (Law & Lau, 2000; Pandey, 2010). Moreover, additional technologies consist of Software as a Service (SaaS), cloud computing and pay as-you-go services, where software applications like that ERP (enterprise resource planning) systems are made accessible to others on request over the Internet and owners of the hotels are charged with a monthly fee depending on the nature and time of use. These all technologies have also come out as an additional gainful method of handling data and operations over the Internet. In addition, companies can take a huge share by efficiently decreasing their system maintenance and protection expenditures. Additionally, green technology is another choice, hospitality firms can take a look at. In fact, it is helpful in improving sustainability in regions like energy efficiency through the utilization of solar power for water heating or cooking. In this scenario, some of the other green technologies include solid waste management, rainwater harvesting, plastic and paper recycling machines and water efficient technologies. If they are adopted effectively, hotels and restaurants can reap long-standing benefits, along with scoring high on atmosphere friendliness and brand image enhancement, among customers. It can give a hotel a competitive edge over other hotels (Pandey, 2010). Some Uses of IT in Hospitality Sector The use of the information technology has offered a lot of benefits and opportunities for the hospitality industry. In their research papers, (Victorino et al., 2005), (Ip et al., 2011), (Buhalis & Law, 2008) and (Camison, 2000) discuss some of the important uses of the information technology for hospitality industry which are outlined below: Customer signaling, for instance in-room modems and online booking Facilitating management, for instance management email Facilitating workers, for instance voice mail Customer service revenue add-ons, for instance interactive TVs and ATM Customer service value add-ons, for instance internet facility and in-room fax machines Wireless technology, for instance curbside check-in, voice recognition, and smart cards Internet marketing for business promotion and customer communication Conclusion At the present, information technology is playing a significant role in every walk of life. Our lives are always surrounded by the information technologies. Seeing the ever-increasing importance of information technologies hospitality industry has started making use of information technologies in different forms. This paper has presented detailed a detailed analysis of some of the important uses of information technologies in the hospitality industry. This paper has summarized the viewpoints of other researchers. At the present, the Internet is playing a significant role in the hospitality industry. The majority of hotels are adopting this tool for marketing purpose. Many hotels use their web sites to communicate with their customers and receive their feedback. The information technology has also helped the hospitality firms to automate their manual or traditional business processes. This paper has also discussed some of the latest technologies which can be adopted by hotels in order to get a competitive edge over other hotels and get the attention of more customers. However, it depends on an organization how effectively it makes use of information technology. A hospitality firm should keep in mind the interest of their customers and offer facilities on the basis of their interests. References Baines, A., 1998. Technology and tourism. Work Study, 47(5), pp.160-63. Buhalis, D. & Law, R., 2008. Progress in informationtechnology and tourism management: 20years on and 10yearsafter the Internet—The state of eTourism research. Tourism Management, 29(4), pp.609-23. Bulchand-Gidumal, J., Melian-Gonzalez, S. & Lopez-Valcarcel, B.G., 2011. Improving hotel ratings by offering free Wi-Fi. Journal of Hospitality and Tourism Technology, 2(3), pp.235-45. Camison, C., 2000. Strategic attitudes and information technologies in the hospitality business: An empirical analysis. International Journal of Hospitality Management, 19(2), pp.125-43. Galen, R.C., Tarun, M. & Cihan, C., 2003. Hospitality Information Technology. 5th ed. 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